[quote=ucodegen]
[quote=SK in CV]Administrative costs are not higher now. As a matter of law, they’re capped. As part of the law. If you’re referring to providers administrative costs going up, there is no evidence to support the claim.[/quote]
Only the administrative costs on the part of insurance companies are capped. This does not include drug companies, hospitals etc. If you remember, Martin Shkreli basically testified to congress that they created this situation when brought in to testify why he jacked up the price on several of his companies drugs (One of them being a lifesaving AIDS drug that he boosted the price 50x from $13.50 a tablet to $750 – because of insurance, the market would bear it). He was slimy, smirking.. etc but unfortunately he was also correct. He was not convicted for what he did (though it was immoral) He was arrested on fraud due to a different issue.
The cap on administrative costs and limit on the loss ratio can be gamed by the insurance companies. The number is calculated as a percentage of premiums paid. If the underlying costs (hospital/drug etc) go up, the premiums have to go up… and therefore the insurance profits also go up (because their allowable charge is based upon percentage of premiums). This is why Defense contracts are sooo expensive. They are limited to about 8% of costs on profit (I used to work as a Defense Contractor). Yet we still see ridiculous costs on defense items that really should be cheaper.[/quote]
Is there some evidence that the administrative cost of providing care has gone up? Martin Shkreli’s testimony had absolutely nothing to do with the ACA.
